“SAMRUK-ENERGY” JSC | Integrated ANNUAL REPORT

Executive body

The Joint Executive body in the form of the Company’s Management Board manages daily operations.

The Management Board ensures the compliance of the Company’s operations with the development strategy, business plan and decisions made by the Sole Shareholder and Governing Body in the manner of cooperation with the Board of Directors and interaction with all stakeholders.

The chair and members of the Executive body have sufficient knowledge, skills and experience necessary to perform their roles and responsibilities, and also have spotless business and personal reputation.

The qualifying criteria for the positions of the Management Board members of the Company were approved by the decision of the Company’s Board of Directors and meet the requirements for improving management efficiency, the distribution of strategic goals, business processes, duties and responsibilities in accordance with the organizational structure of the Company.

ORGANIZATIONAL STRUCTURE OF “SAMRUK-ENERGY” JSC

Composition of the Management Board

Zhulamanov Bakitzhan Tolevzhanovich

Chairman of the Management Board

Date of birth: December 23, 1966

Citizenship: the Republic of Kazakhstan

You may learn more about his resume at www.samruk-energy.kz


Aliyev Yerlan Zhenisovich

Managing Director for Economy and Finance, member of the Management Board

Date of birth: February 11, 1969

Citizenship: the Republic of Kazakhstan

You may learn more about his resume at www.samruk-energy.kz


Tutebayev Serik Suinbekovich

Managing Director for Production and Asset Management, member of the Management Board

Date of birth: May 27, 1958

Citizenship: the Republic of Kazakhstan

You may learn more about his resume at www.samruk-energy.kz


Composition of the Management Board as of 31.12.2018:

  1. Zhulamanov B.T. – Chairman of the Board;
  2. Aliyev Y.Zh. – Managing Director for Economy and Finance, member of the Management Board;
  3. Akberdin R.O. – Managing Director for Development and Sales, member of the Management Board;
  4. Tutebayev S.S. – Managing Director for Production and Asset Management, member of the Management Board;
  5. Saulebay M.O. – Managing Director for Risks and Legal Affairs, member of the Management Board.

In 2019, based on the decision of the BoD of “Samruk-Energy” JSC,  members of the Management Board Akberdin Rinat Olegovich and Saulebay Malik Oraluly ceased their powers.

Remuneration of the Management Board members

In order to determine the conditions and procedure for performance appraisal and the payment of remuneration to the Management Board of the Company, the “Rules for performance appraisal and remuneration of management and executive employees of Samruk-Energy JSC” are available at the Company.

The rules are based on the following principles:

  1. the interrelation of remuneration with the implementation of tasks that meet the interests of the Company and its shareholder (s);
  2. the simplicity and transparency of principles for setting the amount of remuneration;
  3. the dependence of the amount of remuneration on the results of the Company’s activities and employee performance.

The Board of Directors assesses the head and members of the executive body. The main evaluation criterion is the achievement of the KPI.

Remuneration of members of “Samruk-Energy” JSC Management Board in 2018 amounted to 104,896,000 tenge, which includes salaries and other short-term rewards of six key positions.

Management Board Activities

30 in-person meetings of the Company’s Management Board were held in 2018, and 381 issues were considered.

The main issues addressed

The following documents were approved: Rules for performance appraisal of “Samruk-Energy” JSC employees, “Samruk-Energy” JSC tax accounting policy, the Rules for Professional Skills Training and Adaptation of Employees of “Samruk-Energy” JSC, the Matrix of Risks and Controls for Accounting and Financial Reporting Processes of “Samruk-Energy” JSC, internal regulatory documents of “Samruk-Energy” JSC group of companies, the Charter of “Samruk-Energy” JSC Transformation Program as well as budgets/Development plans, wages schemes, staff list at “Samruk-Energy” JSC group of companies. The investment stages of ongoing projects, issues of IAS, Compliance Services were considered.

Number of meetings of the Company’s Management Board

 

2016

2017

2018

Number of meetings

27

19

30

The share of in-person meetings

100 %

100 %

100 %

Attendance

100 %

100 %

84 %

The number of considered items

430

344

381

Management Board Committees

Currently, the Company’s Management Board has the following advisory bodies set up to provide the members of the Management Board with expert assistance in addressing significant challenges.

All committees report to the Company’s Management Board and operate within the competence granted to them by the Management Board in accordance with regulations on these bodies.

The Committee for risks

The Committee assists the Management Board in making decisions in the area of risk management, the Company’s management and internal control system, prepares recommendations and proposals for organization and maintenance of an effective risk management system, internal control, ensuring their operation and development of processes aimed at identification, evaluating, monitoring and controling risks. The Committee also prepares proposals for controlling over activities in these areas.

The Committee’s composition:

Chairman of the Committee – Managing Director for Risks and Legal Affairs;

Deputy Chairman of the Committee – Managing Director for Business Transformation;

Members of the Committee – Managing Director for Development and Sales; Managing Director for Economy and Finance; Managing Director for Production and Asset Management; Managing Director for Procurement; Financial controller; Director of “Risk management and internal control” department; Head of the Internal Audit Service (without voting right); Head of Compliance Service (without voting right).

Report for 2018

Number of meetings

4

Number of considered items

11

Attendance, %

94

Key items

On preliminary approval of updating of certain internal regulatory documents on risk management of “Samruk-Energy” JSC

On preliminary approval of the Risk Management Report with description and analysis of key risks, as well as information on the implementation of plans and programs for mitigating “Samruk-Energy” JSC risks for the 4th quarter of 2017, 1st, 2nd and 3rd quarter of 2018

On consideration of “Samruk-Energy” JSC risk culture assessment report for 2018

On preliminary approval of the consolidated Risk Register, the consolidated Risk Map, Key Risks Management Action Plan with determination of tolerance levels for each key risk, Passports of “Samruk-Energy” JSC Key Risk Indicators for 2019

On preliminary approval of risk appetite of “Samruk-Energy” JSC for 2019

On consideration of the Report on fulfillment of the Department’s Work Plan for 2018

On consideration of the Report on execution of 2018 Work Plan of the Committee for Risks and Management System and approval of the Work Plan of the Risk Committee for 2019

On approval of the Department’s Work Plan for 2019

Committee for Planning and Performance evaluation

The main purpose of the Committee is to improve the performance of “Samruk-Energy” JSC group of companies, including optimizing the structure of their assets and expenditures, monitoring of KPI, consideration of Development plans, financial statements.

The committee’s composition:

Chairman of the Committee – Managing Director in charge of economics and finance matters

Deputy Chairman of the Committee – Managing Director in charge of development and sales matters

Committee members – Managing Director for Production and Asset Management, Managing Director for Business Transformation, Managing Director for Procurement, Managing Director for Risks and Legal Affairs, Head of “Financial Control” Department, Head of “Price Monitoring and Category Management” Department, Auditor of Internal Audit Service (without voting right).

Secretary of the Committee – Head of the structural unit responsible for strategic planning and economic analysis.

Report for 2018

Number of meetings

35

Number of considered items

88

Attendance, %

100

Key items

On results of financial and business operations of “Samruk-Energy” JSC group of companies

On consideration of the draft Development plan of “Samruk-Energy” JSC group of companies for 2019–2023

On consideration of the draft Annual budget of “Samruk-Energy” JSC group of companies

On approval of adjustments of the approved budget

Investment and Innovation Council

The Committee helps to increase the efficiency of investment and innovation activities across “Samruk-Energy” JSC group of companies.

To this end, the Council develops recommendations on investment and innovation activities, the implementation of certain stages of the pre-investment and investment project, the development of recommendations for the transition to the next stage; the acquisition and alienation of shares (equity stakes) of other legal entities by the Company, including as part of the exercise of the priority right to acquire the subsoil use right of an object associated with the subsoil use right, the merger of “Samruk-Energy” JSC group of companies with third-party legal entities, the establishment of legal entities as part of Investment projects.

The Committee’s composition:

Chairman of the Committee – Chairman of the Management Board;

Deputy Chairman of the Committee – Managing Director for Production and Asset Management;

Committee members – Managing Director for Development and Sales; Managing Director for Economy and Finance; Managing Director for Business Transformation; Managing Director for Procurement; Managing Director for Risk and Legal Affairs; Head of the Project Office; Head of the Company’s Compliance Service – as an expert without the right to vote; senior auditor of the Internal Audit Service of the Company – as an expert without voting right.

Independent expert – Representative of “Almaty University of Power Engineering and Telecommunications” NJSC.

Report for 2018

Number of meetings

7

Number of items considered

23

Attendance, %

90

Key items

On approval of pre-investment stage of the project “Gasification of Almaty Energy Complex. Modernization of Almaty CHP-2 with minimization of environmental impact”

Transfer of Kensu river flow to the Bestyubinsk reservoir of Moynak HPP

On the implementation of the investment stage of the project “Construction of a 416 kW solar power plant in Kapshagay city”

Asset and Liability Management Committee

The purpose of the Committee is to ensure timely and quality decision-making on matters related to the preliminary approval of the investment decision on placement of the Company’s temporarily available cash. The Committee makes recommendations on financial assets, including the investment of money in financial instruments, controls over the compliance with the planned and the state of the actual standards when placing funds. In addition, the Committee analyzes the investment portfolio to determine whether it is in line with the current and projected market situation, develops recommendations for risk hedging with a view to minimizing them, and develops recommendations for reinvesting, diversifying and classifying the treasury portfolio.

The Committee’s composition:

Chairman of the Committee – Managing Director for Economy and Finance;

The Committee members – Director of “Risk management and Internal Control” Department, Director of “Treasury and Corporate Finance” Department, Director of “Accounting and Tax accounting” Department, Director of “Strategic Planning and Economic Analysis” Department.

Report for 2018

Number of meetings

2

Number of items considered

2

Attendance, %

100

Key items

On opening of the new bank deposit

 

On approval of consolidated limits of “Samruk-Energy” JSC for balance sheet and off-balance sheet obligations to counterparty banks

The Management Board of “Samruk-Energy” JSC made the decision No. 15 dated August 13, 2018, where it decided to merge the Asset and Liability Management Committee with the Credit Committee of “Samruk-Energy” JSC.

Credit Committee

The main tasks of Credit Committee is to ensure timely and high-quality decision-making on issues related to attracting, granting loans, financial assistance and issuing guarantees, minimizing risks as well as providing recommendations on the effective management of structural assets and liabilities of “Samruk-Energo” JSC.

The Committee’s composition:

Chairman of the Committee – Managing Director for Economy and Finance;

Committee members – Managing Director for Risk and Legal Affairs; Director of Treasury and Corporate Finance Department; Director of Risk Management and Internal Control Department; Head of the Project Office; Financial Controller;

Independent expert – Head of Compliance Service.

Report for 2018

Number of meetings

8

Number of items considered

8

Attendance, %

94 %

Key items

“On signing the supplementary agreement No. 4 to the Agreement on opening a credit line No. 16-14285-01-KL (installments) dated June 16, 2016 with “Sberbank” SB JSC”

“On increasing “Samruk-Energy” JSC obligations by an amount ranging from two (inclusive) to ten percent of its own capital by entering into Credit Agreements with the Asian Development Bank”

Strategic Planning Committee

The Committee was established in 2018.

The Committee was established to develop recommendations in the field of strategic development, including matters on the development of actions that will improve the Company’s performance in the long term.

The committee’s composition:

Chairman of the Committee – Chairman of the Board;

Deputy Chairman of the Committee – Managing Director for Economics and Finance;

Committee members – Managing Director for Production and Asset Management; Managing Director for Development and Sales; Managing Director for Risk and Legal Affairs; Managing Director for Business Transformation; Director of Strategic Planning and Economic Analysis Department; Director of Treasury and Corporate Finance Department; Director of Asset Reorganization and Sales Department; Director of Generation and Fuel Department; Director of Renewable Energy Sources and Distribution Department; Director of Digitization and Production Efficiency Department; Head of the Trade House; Director of Market Development Department; Head of the Project Office; Director of Investment Analysis Department; Director of Human Resources Department; Head of Transformation Office; Director of Corporate Governance and Sustainable Development Department; Director of Information Technologies Department; Head of Strategic Planning section. Secretary of the Committee; Senior manager of Strategic Planning section.

Report for 2018

Number of meetings

4

Number of items considered

17

Attendance, %

100

Key items

On the volumes of electricity production and sale, including export destinations (CASA-1000. RF. Kyrgyzstan, Uzbekistan, PRC, etc.)

On the volumes of coal production and sale, including export destinations

On the development of the portfolio of new products relating to electricity sales

On the list of promising investment projects

Analysis of potential challenges and risks associated with the external environment (PESTEL analysis)

About 1st and 2nd level mission, vision, strategic objectives of the Company

About forecasts on electricity and coal sales volumes in the domestic and foreign markets

On strategic initiatives broken down by business areas

Personnel and Remuneration Committee

The Committee was established in 2018.

The purpose of the Committee’s activities is to develop recommendations on human resource management. analysis, evaluation and monitoring of compliance of personnel policy with the Company’s Strategy, consideration of the list of senior and management employees of the Company’s subsidiaries and affiliates, whom the Management Board appoints or approves.

The Committee’s composition:

Chairman of the Committee – Managing Director for Business Transformation;

Deputy Chairman of the Committee – Head of the Office of the Chairman of the Board;

Committee members – Managing Director for Production and Asset Management; Managing Director for Risk and Legal Affairs; Advisor to the Chairman of the Board (for security matters); Director of Human Resources Department.

Report for 2018

Number of meetings

10

Number of items considered

57

Attendance, %

100

Key items

Development of recommendations on human resource management (provision of recommendations on the approval of staff lists / wages schemes. personnel policy)

Appointment or approval of appointments made by the Management Board

The Committee for Occupational Health and Safety and Environmental Protection

The Committee was established in 2018.

The purpose of the Committee is to ensure effective work in addressing issues related to OHS and environmental protection of the Company by providing relevant recommendations on evaluation the effectiveness of policies and systems for identifying and managing risks associated with occupational health and safety and environmental protection; analysis of all fatal accidents, as well as serious incidents, and actions taken as a result of such incidents and incidents; examining the results of any independent OHS audits, a review of any strategies and action plans developed in response to the issues raised. And, if possible, providing the Board of Directors with advices with respect to these issues.

The Committee’s composition:

Chairman of the Committee – Managing Director for Risks and Legal Affairs;

Deputy Chairman of the Committee – Managing Director for Business Transformation;

Committee members – Director of Generation and Fuel Department; Director of RES and Distribution Distribution; Senior manager of Occupational health and safety and environmental protection Department; Senior manager of Corporate governance and sustainable development Department.

Report for 2018

Number of meetings

4

Number of items considered

9

Attendance, %

95

Key items

Consideration the item about the need to impose a moratorium on taking disciplinary actions for occured incidents (except for fatal accidents and other incidents with serious consequences)

Consideration of the item about the approval of standards developed as part of SKE.06 project “Implementation of the new model for managing integrated security of “Samruk-Energy” JSC